Megaprojects

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We can define a Megaproject as an unique endeavor, a project whose special conditions make it even more special than normal projects, for higher time, budget and/or resources allocated than in similar projects. Risks, requirements and difficulties to perform it are commonly high as well.

There is not a rule of thumb to define when a project should be considered as a Megaproject. Some authors consider that projects exceeding USD 1 billion must be included in the list, but it will always depend on the context. To help you clarify such extent, consider the following table:

Project Is considered…
A road to link two states. 60 miles of tarmac with service areas …as a simple huge project, as many other similar projects are done every year around the world, without major difficulties. Even when budget is normally high, and time to construct a road is also long, it has nothing special to create problems for contractors, so this should be considered as a normal expensive long-term project. May after an initial assessment discover that the road comes across a Natural Park, but without further details, it should be considered as a simple big project.
A 50 kms. tunnel to link UK and France under the Channel …as a Megaproject, as cost is huge (over 16.000 M €), difficulties are high as nothing similar has been done in the world before, and risks associated were also extreme.

In the previous example, notice that we had higher length in the first case (60 miles, aprox. 75 Kms against 50 Kms), but the final magnitude of the project doesn’t matter to consider it as a Megaproject. state_roadThe budget, time, resources and risks considered are what make the difference.

Project Is considered…
…a line cruiser …as a simple project. Shipyards have substantial knowledge to perform this endeavour without major issues
…the “Queen Mary 2” or “Freedom of the Seas” construction …a Megaproject, because the size and weight they were trying to build implied lots of new developments never done before. Thus cost was enormous.

Telecom_projectExamples of Megaprojects in the Telecom area could be the International optics fiber submarine cable laid along the South America coast. It involves 25.000 Kms. of wires, and it passes across 7 countries.

Megaprojects tend naturally to fail. A special care as well as a reliable and feasible project plan are essential to the success of these projects, and Project Managers must pay special attention to risks and stakeholders.

MEGAPROJECTS RISK PROFILE

Below are listed the most representative features of identity in the Process Groups Megaprojects and problems typically associated

Process Group/Element Typical behavior
Communication As these projects often involve hundreds of people, communication is very difficult. In addition, there are often many layers of subcontractors, making fluent communication very difficult.
Stakeholders There are usually many stakeholders (interested parties) and interest can be diametrically opposed. There are also political interests if the project is a public work or involving the State.
Management It is typically more complex, having many stakeholders and staff to manage. The management hierarchy is not always followed properly.
Technology Challenges PWB_new_techMost of the megaprojects are technologically very advanced, and seek to design and build very complex systems ever created. This creates a high risk component that is often difficult to manage.
Costs In the Megaproject Paradox overspending can be at least 50% to 150% of baseline. Much more than if the project had been fragmented and carried out in separate stages.
Quality Because many times the project is critical for life (bridges, ships, tunnels this part of the Mega ,…) quality takes the bulk of the budget, to ensure that there are no problems.
Subcontracting There are usually many, and poorly managed.
Time / Schedule Although it is decided to keep a tight schedule, Megaprojects usually have an agenda too extended in time. That makes the stakeholders’ flow to change throughout the project life, and that the initial interest in it is diminishing over time. In the absence of good planning and / or communication, delays are common.